Malaysia: Retail sector takes viral and political blow
PETALING JAYA: The Malaysia Retailers Association (MRA) said the coronavirus (Covid-19) outbreak and the change in government – both unexpected events – have affected retail consumption in the first two months of this year with retailers reporting a drop in sales of as much as 80%.
If unresolved over the next couple of months, it would “drastically” affect the retail consumption pattern, Retail Group Malaysia managing director Tan Hai Hsin(pic) said in his Malaysia Retail Industry Report for March 2020.
The worst-hit sectors are tourism and retailing. “The drastic decline of tourists affected retail shops located in major shopping districts, tourist attractions, theme parks, resort islands as well as international airports, ” Tan said.
Malaysians, out of fear of contracting the virus, reduced their outdoor shopping activities since the domestic spread of covid-19 in early February, Tan said.
“This will lead to the country’s retail industry to suffer from negative growth rate for the entire year, ” Tan said. The main driver of Malaysia’s economy is private consumption and private investment.
Shopping traffic declined between 10% and 50%. Shopping centres which are reliant on tourists were affected more than those located in residential areas and small towns, he said.
He expects the January-March quarter of the retail industry to suffer a decline of 3.9% compared to a year ago. This is worse than the average estimate by MRA members at a 0.4%, pre-Covid-19, which has since been declared a pandemic by the World Health Organisation on March 11.